Why CTI BioPharma Corp. Is Sinking Today

Shares tumble in response to disappointing clinical news. Here's what investors need to know.

By Brian Feroldi – Updated Jul 9, 2018 at 12:26PM EST

What happened

In response to the company sharing a clinical update, shares of CTI BioPharma (CTIC +0.00%), a clinical-stage biotech focused on blood-related cancers, fell 13% as of 12:05 p.m. EDT on Monday.

So what

CTI Biopharma provided investors with an update on its PIX306 trial. This 312-patient phase 3 study was designed to evaluate its cancer drug Pixuvri in combination with Biogen's drug Rituximab, in comparison to Eli Lilly's drug Gemzar in combination with Rituximab as a treatment for non-Hodgkin lymphoma.

Unfortunately, the company stated that the study failed to meet its primary endpoint, which was an improvement in progression-free survival.

Doctor holding up hand as if to say "Stop."

Image source: Getty Images.

Here's what CTI BioPharma's CEO Adam Craig had to say about the results:

We are disappointed with the outcome of the PIX306 trial and will proceed to conduct a thorough review of clinical data to assess the next steps for the PIXUVRI program. We would like to express our appreciation to the patients, families and investigators who participated in the study.

Given the disappointing news, it isn't hard to figure out why shares are tumbling today.

Now what

While downbeat clinical news is never good, CTI BioPharma's shares are not being mauled too badly today, because this company's primary pipeline asset is called Pacritinib. The company has high hopes for the experimental myelofibrosis drug and expects to report top-line clinical data from a phase 2 trial in the first quarter of 2019. If that data looks good, then today's setback will look insignificant by comparison. However, there's no doubt that CTI BioPharma is a high-risk stock with a checkered history. For that reason, I'm content to watch this story play out from the sidelines.

Brian Feroldi first starting "investing" -- if you can call trading penny stocks investing -- in 2004. Thankfully, he lost a good chunk of his money early on and realized there was far more to the stock markets than just buying and selling junk. Realizing that he needed help, Brian voraciously read every book on money and investing that he could get his hands on. Thankfully, that included "the Motley Fool's Investing Guide" and he has been investing using Foolish principles ever since. Brian's investing strategy has morphed into a simple three-step process: 1) Find the highest quality companies on the public markets 2) Buy those companies 3) Sit back and let compounding work its magic Brian was lucky enough to be hired at a start-up medical device maker right out of college. However, after sticking with the company for more than a decade he realized that he was spending all of his free time on his true passion -- finding great stocks to buy. Brian struck gold in 2015 when he was hired by Motley Fool to cover the healthcare industry for Fool.com. He has been doing that ever since. Brian currently resides in Rhode Island where he is happily married and is working hard to raise three small kids. Brian's hobbies are playing board games (chess & escape rooms are his favorite), watching his kids play sports, meeting up with friends, finding ways to lower his carbon footprint, and cheering on the Patriots.

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Why CTI BioPharma Corp. Is Sinking Today

What happened

So what

Now what

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